For investors aiming to achieve substantial price gains, a mixed method of fundamental and technical study can be an effective plan. The objective is to find firms with sound basic business expansion, firm and rising earnings, secure financials, and good profit margins, that are also near a possible price move higher based on chart formations. This technique tries to match a company's internal financial force with positive market timing, looking for chances where better technical indicators may suggest the market is starting to acknowledge the basic quality. Harmony Biosciences Holdings (NASDAQ:HRMY) comes from a filter made to locate this specific mix: sound expansion stocks showing a positive technical arrangement.
Fundamental Quality: The Source for Expansion
The base of this plan is a company's financial condition and expansion path, which for HRMY seems very firm. The company's fundamental analysis report gives it a high total score of 8 out of 10, with especially high marks in Expansion (9), Profitability (8), and Financial Condition (8). These three create a positive base for an expansion investment.
- High Expansion Measures: HRMY shows forceful enlargement, a required condition for an expansion stock. In the last year, Earnings Per Share (EPS) rose 50.71% and Revenue increased 21.13%. For the future, experts predict this force to persist with estimated yearly EPS expansion close to 37%. This steady and quickening earnings force is exactly what expansion investors look for.
- Strong Profitability and Effectiveness: Good expansion is most useful when it is profitable. HRMY does very well here, with a Profit Margin of 22.48% and a Return on Equity of 22.23%, numbers that place in the top group of its pharmaceutical industry group. This shows the company is not only increasing sales, but is doing so effectively and turning that expansion into large returns for shareholders.
- Sound Financial Condition: An expansion story can be stopped by a poor balance sheet. HRMY's financial condition score of 8 reduces these worries. The company has a firm Altman-Z score, little debt compared to its free cash flow (a Debt/FCF ratio of 0.57), and good liquidity with a Current Ratio over 3.7. This financial steadiness gives the company the ability to put money into its projects and handle possible market changes.
Positive Valuation: Space for Increase
A main danger in expansion investing is paying too much for future possibility. HRMY currently avoids this problem, showing a valuation that seems fair compared to its high expansion and profitability. Its Price-to-Earnings (P/E) ratio of 11.3 is not only much lower than the wider S&P 500 average but is also less expensive than more than 90% of its industry group. This mix of high expansion, high profitability, and a medium valuation is somewhat uncommon and can make a positive difference for investors if the market changes how it values the stock to match its basic results.
Technical Arrangement: A Formation of Pause and Possible Move Higher
While basics explain the why, technical study can help find the when. HRMY's technical analysis report mentions a "positive setup chance" even with a lower total technical score, which is pulled down by poorer relative results over the last year.
The setup is described by a time of lower price movement and price pause after a longer positive direction. The stock has been changing hands inside a set band over the last month, forming a base above a clear support area near $36.00. Lately, the chart showed a "Pocket Pivot" sign, a price increase on larger volume than any down volume day in the last two weeks. This is often seen by technical experts as a mark of gathering, suggesting knowledgeable buying pressure could be appearing.
For the expansion-and-move higher plan, this technical view is important. It suggests the stock could be finishing a time of rest after its earlier rises and might be getting ready for its next step up. A continued move above the close resistance levels, joined by large volume, would form the move higher that technical traders watch for to confirm a new upward stage.
Conclusion
Harmony Biosciences shows a situation where a positive basic expansion story meets a helpful technical formation. The company's firm earnings expansion, high profitability, and clean balance sheet meet the main needs of a lasting expansion investment. At the same time, its chart displays a stock that has paused and is now showing marks of possible gathering, creating the conditions for a possible move higher. This match is what the mixed filter system tries to find.
Find Other Possible Chances This study of HRMY was started by a regular filter for firm expansion stocks with positive technical setups. You can look at the present results of this filter system and find other possible choices by going to the Strong Growth Stock Technical Setups screen.
Disclaimer: This article is for information and learning only and does not form a suggestion to buy, sell, or keep any security. The study is based on data and reports given by other parties. Investing in stocks includes risk, including the possible loss of the original amount. You should do your own study and talk with a skilled financial advisor before making any investment choices.
